How Much Information
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How much information? Chapters from the history of the accounting of information flows and knowledge stocks István Dienes - scientific advisor Cég-INFO Ltd., Budapest [email protected], http://free.x3.hu/infostat "How much information?" A question, which has been raised by electric engineers, mathematicians and the researchers studying the "information revolution" and "information society". In the present paper I outline the history of information accounting and provide an assessment of strengths and weaknesses of various approaches. 1. Chapters from the history of information accounting Chapter 1. Pioneers’ epoch It was Ithiel de Sola Pool and Inose, who were pioneering in the attempts to account information flows and knowledge stocks in a country, particularly in the U.S. and Japan [Pool 1984]. They introduced "production" and "consumption" of information and determined the value of these variables. As a unit of their measurements "word" was introduced. Empirical - and arbitrary - rules to express the the volume of various carriers in a common unit have been defined. While they accounted various carriers and carriers altogether, their tables can not be viewed as accounts as defined in book-keeping. Marc Uri Porat in his unical treatise on U.S. information economy has first provided a comrehensive economi view of all information activities of a country. Chapter 2 System of National Information Accounts - an effort in Budapest Lakoff's epochal works on metaphors [Lakoff] have revealed that language reflects "folk-psychology" of phenomena and processes: the world itself, as it is represented in our mind and brain. In English, Hungarian and in a number of other languages, information is a fluid; it has volume, it flows, can be produced, outputted, inputted or consumed, and it can be stored. Commodities and value, in an economic sense, also obey the rules governing the behavior of "fluids", this is why micro-, and macroeconomic accounts can be defined and applied worldwide both in book-keeping and economy. To explain, forecast and understand the behavior of fluids in a particular situation, the generic theory, the equations of heat and mass transfer should be adopted and applied. The theories concerning economic behavior of "information" that predict or declare that information can be consumed unless its volume in the process would change, contradict to the intuitive contents of the concept itself, which reflects in the word usage, and the traditional official statistics of information goods. An exact theory should be based upon solid concepts, operational measurement procedures in harmony with theory of transport processes. A standard system of standard accounts is needed to compare information-related phenomena in the countries of the world. In any particular measurement the conditions of the situation should be exactly determined and extrinsic quantities should be measured and introduced. It was the Japanese Planning Agency, which first has published bit-based figures for the "production" of information in Japan. Figures for Hungary, which have been compiled by the Poo1's method have been published by the present author: [Dienes92]. At the same time, in 1990 and 1991 the figures and methodology of information accounting have been reviewed and reconsidered. As a result, a new methodology, called SNIA, System of National Information Accounts, was developed, which is directly related to SNA's approach and concepts. Then, information balances of Hungary for the period 1945-1990 have been compiled [Dienes92].The political, practical and statistical considerations behind SNIA, as well as figures for Hungary, can be viewed at http//free.x3.hu/infostat. 2.1 Subjects and objects of the accounting in the SNIA Due to the new approach, any account of information should be in accordance with national accounts, both concerning concepts and figures. SNIA has been based upon the same fundamental general concepts as [SNA93]. These include actor, institutional unit, sector, good, service, commodity, economic transaction, economic stock, economic flow, account, balance. SNIA covers those subjects, objects, relations, acts, actions and activities which are subject to legal definition, require comprehensive treatment and can be subject to operationalization. The vary same concepts, however, have sometimes been interpreted in a wider environment to include events and objects that are beyond the present scopes of SNA, but seem to be important, and new concepts also were introduced. New integrated sectors; the main groups of social actors of information transactions, which are relevant to policy making, should also be added to those of SNA, to reflect real situation, phenomena and processes. SNIA classifies transactions by commodity. Information is understood here as something which forms or formed within (the brain of) either human or machine actors, or is represented in/on the goods/services outputted. Volume/amount of information carried by physically existing goods and services - in a standardized communication situation as defined here - is an attribute of goods and services which is very similar to extrinsic physical parameters. This interpretation seems to be in harmony with exact theories of information, such as Shannon's. The fundamental question of SNA is "Who does What by What means for What purpose with Whom in exchange for What with What changes in Stocks?" In accordance with this, an action is called an information flow if it leads to the change of information assets of participants. A transaction can be called an information transaction, if it implies the flow of information. There is a class of goods and services whose main function is just to convey/carry information, these are called information goods and services. Information goods do not include machines like computers, office and telecommunications devices; rather they include books, diskettes, records and a number of other durable media. The non-exhaustive list of main categories, in terms of which SNIA describes information phenomena, includes information-input, -output, -production (gross and information added), -consumption, -use, -asset, -accumulation, -capital, -stock, productive -consumption, -capital consumption, -export, -import and externalities. Unlike SNA, SNIA makes difference between use and consumption: while consumption assumes the annihilation of the good or service, its use does not. Almost the whole arsenal of macroeconomics is expected to be transformable to SNIA. The most outstanding difference between SNA and SNIA is in the way they valuate flows and stocks. While valuation of transactions in SNA has practically been based upon general substitutability for money, opportunity of exchange for money, SNIA provides the opportunity of vaulation based upon general substitutability of information-commodities for a digital record, opportunity of recording, exchange for a digital record. Accordingly, it is not information in SNIA, which is considered as resource or product, but goods (including non-durable signals) which carry/convey information. This is in agreement with SNA, where it is not "value" which is considered as a resource or product, but goods which have or carry value. Information interpreted in such manner, can be treated similarly to energy. Various versions of SNIA accounts involve the information that goods and services carry at "sensory" or at "perception" level. As an illustration of the several tables and figures, the Figure 1. shows output, consumption, of information commodities in Hungary in the period 1975-1990. So far, basic SNIA tables have been compiled in bit units. Most tables, particularly those concerning all information goods and services altogether, may be, and some actually were compiled in value units, either. These tables -- called twin tables -- show "information economy" in a commodity approach. These tables do not belong to the standard set of tables of SNA, for they contain figures for such a group of goods and services whose elements are scattered in a number of industries, group of kinds and group of services of standard SNA. This set of twin tables, however, may create a bridge, a direct linkage to SNA. Different interpretation of production, different asset and national boundaries make the correction of national SNA aggregates necessary. While SNIA has been designed for macro level analyses, its concepts and structure make it capable to treat other communication issues and situations either; as regional communication or communications among various communities and groups. These accounts do not organically belong to the SNIA as suggested. Chapter 3. A Standard Sytem of National Information Accounts - Budapest in Berkeley In the frames of a Fulbright scholarship at UC Berkeley, the present author has developed the Version 1.0 of SSNIA, a standard system of national information accounts, whose inputs are standard tables of international official statistics or statistics of international organisations. The objective of the system is to provide a comprehensive, multipurpose intellectual framework and vehicle (accounts, balance sheets, tables, based on a set of internationally agreed concepts, definitions, conventions, classifications and accounting rules) which is compatible with SNA. Hundreds of standard indicators are available in the system for the purposes of description and analysis. The framework should allow the governments, business groups and citizens to analyze and display the important and relevant individual